ere it is only necessary to say that most
or all of the money necessary to pay off the maturing bills is raised
by selling another batch of "sixties" or "nineties," an operation which
throws the maturity two or three months further ahead.

From this outline of the way foreign participation in American bond
issues is financed, it can be seen that every time a big issue of bonds
of a railroad or industrial in which European investors are actively
interested, is brought out, it means a large supply of foreign exchange
created and suddenly thrown on the exchange market for sale. Not any
more suddenly or publicly than the bankers concerned can help, but
still necessarily so to a great degree, because big bond issues can
only be made with the full knowledge and cooeperation of a large part of
the public. Bankers who know in advance of large issues likely to be
made and in which they know they will be asked to participate, often
sell "futures" covering the exchange they foresee their participation
will bring into existence, but as a general rule it may be set down
that heavy issues, involving the sale abroad of large amounts of bonds,
are a most depressing factor on the foreign exchange market. Especially
so, as the participants who have agreed to turn over the money to the
railroad, must sell bills to raise it, even if the horde of speculators
and "trailers" who are always on the lookout for such opportunities,
make every effort to sell the market out from under their feet.

3. Uneasiness with regard to the stability of the financial situation
at some point abroad where American bankers usually carry large
balances is another circumstance which often depresses the exchange
market sharply. "Trouble in the Balkans" and "trouble over the Moroccan
situation" are two bugbears which have for years back furnished the
keynote for many swoops downward in the exchange market, and for years
after this book is published will probably continue to do so. Money on
deposit at a point several thousand miles away is naturally very
sensitive, and the least suspicion of financial trouble is sufficient
to cause its withdrawal. Withdrawal of bankers' balances from a foreign
city means offerings of exchange drawn on that point with resultant
decline in rates.

In the everyday life of the exchange market, political developments of
an unfavorable character and war rumors are about the most frequent and
potent influences toward the condition of unea